Rising Rents, Closing Doors A Profile of Housing in Allston Brighton 2019 Allston Brighton Community Development Corporation A PROFIL E OF HOUSING IN ALLSTON BRIGHTON // II EXECUTIVE SUMMARY For the past 38 years, Allston Brighton Community Development Corporation (ABCDC) has been dedicated to opening doors for Allston Brighton residents. Our various program areas strive to make the neighborhood a thriving community and to create opportunities for individuals to achieve their personal dreams. Our home buying program opens doors to homeownership and provides First-Time Homebuyer education and financial coaching for low-to-moderate income people, opening doors to individuals seeking to stabilize their family’s financial situations. The housing development program is focused on stable, affordable rental housing by creating and preserving housing throughout Allston Brighton, a neighborhood that’s been feeling the effects of high rents and limited homeownership opportunities. Our community building and engagement program opens doors to personal and political power for local residents by mobilizing and supporting new voices for community leadership. Our resident services program opens doors to stable and secure housing for the 505 households within ABCDC properties by providing high quality affordable rental housing and case management services. Recently, we have found doors closing on neighborhood residents. Graduates of our class for first-time homebuyers can no longer afford to purchase in the neighborhood, with even condominiums beyond the reach of many residents. Waiting lists for subsidized housing in the neighborhood are growing, and we have witnessed the shrinkage of the subsidized housing stock over the past two years. Our housing development efforts have been stymied by exorbitant acquisition costs, as new construction costs on average $500,000 per unit in a Boston multifamily project.[1] To understand this phenomenon, and to develop a strategy to re-open doors in Allston Brighton, we have undertaken the research summarized in this report. We assessed how general trends in the real estate market are affecting Allston Brighton in particular, so that we can work with residents to develop specific strategies for Allston Brighton. The challenges that confront Allston Brighton in today's market differ from those of other neighborhoods, and demand specialized solutions. Rising rents have led to closing doors for renters, homeowners and homebuyers. Allston Brighton CDC is working with neighborhood residents to find ways to re-open doors for those who call Allston Brighton home. The major findings of the study are: Rental Housing Rents increased dramatically over the past few years and are continuing to rise. Average rents for family-size units (3-bedroom) have increased by 30% over the past two years, 1] Spearance, Cameron. “Boston is Running Out Of Affordable Options To Tackle Sky-High Housing Costs.” Bisnow Boston. November 15, 2018. A PROFIL E OF HOUSING IN ALLSTON BRIGHTON // III from $2,131 to $2,767 per month. Rents for units of all sizes have increased by 32% (on average) or more. Rents in Allston Brighton for a three-bedroom household would require a family earning $52,795 (the median household income in the neighborhood) to pay 63% of its monthly income in rent, 33% more than the generally recommended 30% of income. Rent for a 1-bedroom apartment would exceed the entire gross pay of a full-time worker earning the minimum wage ($21,120/year earned- $21,612 rent only). Although new construction is occurring elsewhere in Boston, the lack of vacant land in Allston Brighton makes it nearly impossible to increase the affordable housing stock significantly. There is also currently only one developable vacant lot owned by the city. Subsidized Rental Housing Projections based on the 2016 U.S. ACS data report indicate that there are approximately 8,392 households in Allston Brighton today earning less than 50% of the neighborhood median income. Virtually all of these households would be eligible for publicly subsidized housing, were the units available. The need for affordable housing in Allston Brighton far exceeds the supply, as applicants on waiting lists generally wait five or more years before getting a unit. Although tenant-based subsidies are available for some low-income residents, today's rents are so high that even families with rental vouchers or certificates may have difficulty finding affordable housing in Allston Brighton. Impact of Colleges and Universities Students in private housing account for approximately 12.4% of the total Allston Brighton population. There is a higher percentage of students living in private housing in Allston Brighton than in any other neighborhood of the city. Due to a variety of factors, students can more frequently afford to pay $2,800 (on average) for a three- bedroom apartment, or $930 per student per month (sometimes even less if there’s more than one student per room or using a dining/living space as an extra room). For a family to afford a monthly rent of $2,800 and not pay more than 30% of its income in rent, a family would need to earn $110,000 a year. Universities' pricing for on-campus housing provides a significant incentive to students to live in off- campus apartments. A PROFIL E OF HOUSING IN ALLSTON BRIGHTON // IV Homeownership The median sales price for a single-family home is about $740,000, whereas two and three-family homes are well into the $1-1.4 million range. All types of homes have seen drastic increases in prices since 2010. Household purchasing power has not kept up with rising real estate prices. All types of home purchase are beyond the means of the average Allston Brighton household. Allston and Brighton have in general a low homeownership rate, at around 10% for Allston and 22.5% for Brighton, compared to a 36% homeownership rate citywide in Boston. Homeownership is a key component in a family's ability to achieve financial stability. It is also closely correlated with a neighborhood's ability to advocate for public services and to provide a nurturing environment for children. ACKNOWLEDGEMENTS 2019 Report Update: The "Rising Rents, Closing Doors" report was originally produced in 1999 by the staff of Allston Brighton CDC, under the direction of then Executive Director, Bob Van Meter. Rebecca Plaut served as Project Coordinator. The research and writing team consisted of: David Dologite, Ava Kuo, Rebecca Plaut and Josh Sevin. Twenty years later, this report has been updated to reflect the changing market conditions which have continued to strain the rental and homeownership markets – closing the door for many who wish to call Allston Brighton home. The 2018 report update was produced under the direction of Jason Desrosier and supporting staff. The research, writing and design updates were done by Hannah Urbanski and Jason Desrosier. With special thanks to: Jo-Ann Barbour, Charlesview Inc. Bruce Kline, Brighton resident Kevin Cleary, Remax Real Estate Devin Quirk, City of Boston Department of Neighborhood Development Charlie Vasiliades, ABCDC Board of Directors Michelle Meiser, Allston Brighton CDC Kathy Brown, Boston Tenants Coalition Mario Teran, City of Boston Department of Neighborhood Development Amelia Najjar, City of Boston Department of Neighborhood Development Joel Wool, Office of District 1 City Councilor Lydia Edwards A PROFIL E OF HOUSING IN ALLSTON BRIGHTON // V TABLE OF CONTENTS Chapter 1: Who Lives In Allston Brighton?.................................................................................1 Racial and Ethnic Composition……………………………………………..............................................1 Income and Poverty………………………………………………………......................................................2 Age of Population…………………………………………………………………….......................................……3 Conclusion……………………………………………………………………………….............................................3 Chapter 2: Rental Housing...........................................................................................................4 Rising Rent Levels……………………………………………..................................................................4 What is the Affordability Gap and Why Does It Matter? …………………………….....................8 Vacancy Rates……………………………………………………………………….........................................…….9 Construction of New Housing ……………………………………………………..............................……..10 Conclusion…………………………………………………………………………..........................................…….12 Chapter 3: Subsidized Rental Housing……………………………………………….............................………..13 What Is Subsidized Rental Housing and Who Needs It? ……………………….......................13 Current Trends………………………………………………………………………............................................14 Types of Subsidized Housing in Allston Brighton……………………………...................…………14 Waiting Lists…………………………………………………………….........................................………………..17 Projections………………………………………………………………………….........................................……..17 Tenant-Based Subsidies…………………………………………………………….......................................18 Conclusion………………………………………………………………………..........................................……….19 Chapter 4: Impact of Colleges and Universities………………………………………….....................………20 How Do Local Institutions Affect Housing in Allston Brighton ………………………............20 Who Are the Students Living in Allston Brighton………………………………....................………20 What Impact Do Students Living Off-Campus Have in Allston Brighton……………......…21